A Firm Should Exit the Industry If Which of the Following

question 85

Multiple Choice

A firm should exit the industry if which of the following conditions apply?

• A) TR > TC
• B) P < AC
• C) Lifetime expected profit is positive.
• D) Prices are low now but expected to rise.

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Definitions:

Credit Entries

Accounting entries that increase liabilities or decrease assets, typically reflecting incoming payments or the granting of credit to a customer.

Transactions

Financial activities or events that affect the financial position of the company.

Owner's Equity Accounts

Accounts representing the owner’s claim or interest in the business assets after all liabilities have been deducted.

Credits

Entries on the right side of an account, indicating an increase in liabilities, equity, or revenue, or a decrease in assets or expenses.